Replies to post #40880 on Mexus Gold US (MXSG)

[gitreal]

You spread it across the number of ounces actually produced.

Really? You sure you want to calculate the cost per ounce that way?

[T-Hawk]

The difference is in your example is you know the starting value of the car and what the approximate value the car will be in 5+ years when you want to trade or sell it off.

In Mexus case it has no ideaa how many ounces it will produce in a year, how many ounces it holds in reserve or how much material needs to leached to produce an ounce. How can you depreciate a reserve value if you don't know how much in reserves your starting with?

To use your anaology it would be like saying it only cost us .25 mile to operate this car. But we don't know how much the car was worth new or how many years it will last, but we know how much gas we use and what the insurance costs so that's how we determine the cost per mile.

At this point I'm not confident Mexus knows what equipment, fuel, chemicals and labor are needed to consistently produce gold. Yet somehow the company can provide an estimated cost per ounce.

[T-Hawk]

Simple. You spread it across the number of ounces actually produced

If Mexus used that method to calculate a per cost ounce then it would be significantly higher than the $400/oz being thrown around.

At 3 million a year operating budget (and that doesn't include incurred costs/debt from prior years) spead out amongst the 300 oz produced this year (and that number is being extremely generous) the cost per ounce would be $10,000 per ounce.